ADB economic report misses point in data presentation, recommendations

  Majuro, Marshall Islands 26 July 2016: An Asian Development Bank report on Pacific island economies recognizes the Parties to the Nauru Agreement’s vessel day scheme (VDS) as “an outstanding global example of coastal states taking control of a fishery based on highly migratory stocks” that resulted in a more than tripling of revenue to PNA members from 2010 to 2014.

   But numerous ADB recommendations to modify the VDS demonstrates the conflict of interest inherent in major donor agencies when dealing with small island developing states asserting their rights over their natural resources, said outgoing CEO of the PNA Dr. Transform Aqorau.

   “The harsh truth for the ADB and other major regional donors is that the VDS — probably the most successful single development instrument in the region — succeeds in part because the donors, and the major regional organizations that they support, are excluded and are not directly involved,” said Dr. Aqorau.  He was commenting on ADB’s Pacific Economic Monitor that in its July edition focused on fisheries in Pacific economies, with a special section on the VDS, titled “Some options for enhancing the VDS.”

   Dr. Aqorau said he was not denying the importance of donor programs and the major regional organizations that the donors support, to the management and development of the region’s tuna fisheries. “The success of the VDS depends on the advances in monitoring control and surveillance, observer training and science that have been heavily donor supported,” he said. “But there can be no role for the major donors in the design and operation of programs like the VDS because they are deeply compromised by their own strategic interests and the interests of those who fund them.”

   This is a lesson not just for the VDS, the PNA, or even fisheries, he said. “It is a lesson that almost certainly applies to sustainable development in the Pacific Islands in other sectors,” said Dr. Aqorau. “There continues to be an important role for national and multilateral donors in assisting with capacity and institution building and infrastructure, provided this is within sensible limits that avoid the kind of overwhelming aid dependence that is emerging in some national sectors. But there should be no role for donors or countries from outside the Pacific Islands in the central strategic discussions about the use of the region’s natural resources because their presence is divisive, and they can’t be trusted.”

   While ADB has a high-quality program of providing development finance to Pacific Island countries and is excellent at helping PNA members manage their increased revenues from the VDS, its performance in fisheries management has been systematically poor, said Dr. Aqorau.

    When PNA was developing the design of the VDS, ADB advised that it was virtually impossible to achieve returns over six-to-eight percent of the landed catch value of tuna. Today, however, using the VDS, PNA is now successfully charging 15-to-20 percent of the catch value, said Dr. Aqorau.

   “ADB also has the problem that the PNA efforts to assert their economic independence are often at the cost of large businesses in the advanced Asian countries that are the major source of finance for the ADB,” said Dr. Aqorau. “It’s a classic case of policy incoherence: the situation of a development bank whose sole focus in its activities in the Pacific Islands is supposed to be on supporting economic development but isn’t free to provide the support needed in the most important area of promoting sustainable development for Pacific Island communities — tuna management and development — because of the effect on the economic interests of some of its major donors.”

   Dr. Aqorau said ADB’s comments on the VDS “repeat the old lie perpetuated for a long time by ADB that Asian fleets can’t afford to pay more when it says that purse seine fleets are hovering just above economic viability. This ADB assertion flies in the face of the fact the PNA VDS has increased revenues from these fleets by an extra $300-to-400 million in the last several years and the fleets are still profitable as indicated by the continuing flow of investment in new vessels and the continuing increases in prices of vessel days that vessel owners are offering in tenders for days.” 

   The PNA CEO added that economic data for the coming Western and Central Pacific Fisheries Commission (WCPFC) Scientific Committee projects continuing improvements in the economic condition of the purse seine fleet indicating that the this fleet can be expected to afford significantly higher fees for access to PNA members’ waters in future, said Dr. Aqorau.

   ADB advocacy for PNA to change from its current VDS “effort” limits to a “quota” system ignore two recent studies that described the VDS as an excellent management system for the PNA fishery and pointed out that there is no reason to believe that changing from days to tons will, by itself, increase fisheries rents or improve the quality of sustainability management in the fishery.  

   Dr. Aqorau criticized “the arrogant and patronizing tone” of this latest ADB economic report on fisheries, saying this “has characterized the past views of the ADB on tuna management. They look at the PNA members and other small Island countries engaged in the large and bold enterprise of taking back control of the tuna fisheries in their waters from the distant water fleets so that their people can secure equitable benefits from their fisheries, and they prescribe that someone should take that responsibility away from the Pacific Island countries and do it for them.”

   Dr. Aqorau pointed to the ADB report’s suggestion that “an honest broker” be engaged to assist with negotiating license terms. “The PNA approach is exactly the opposite,” he said. “The PNA approach recognizes that Pacific Island countries have common and shared interests in the regional tuna fisheries, but they also have differences in their national needs, opportunities, objectives and interests — and nobody knows those national interests better, and nobody can secure those interests and opportunities better than the individual PNA member governments. 

   “The VDS is explicitly designed for VDS participants to work together to secure their rights in the fishery, including their need for a sustainable purse seine fishery, through the collective mechanism of the VDS. But they are able to use those rights for their own peoples by deciding how their days will be used, including who they will sell them to, or trade with, and the terms of those trades in order to serve the interests of the peoples of the PNA.” 

   Dr. Aqorau acknowledged that there are challenges and difficulties in this approach. “But it is up to the PNA members to resolve them, and the record shows that they have been very successful in doing so,” he said.